Blockscout and Wallets: A Guide to Secure Blockchain Interactions

Cryptocurrency wallets are the gateway to blockchain; they store our private keys and enable us to sign transactions, acting as the first line of security for everything we do onchain.

As the Ethereum Foundation puts it, “Wallet UX is where security begins for all users of Ethereum”. If users can’t safely manage their keys or understand what they’re signing, they can’t use blockchain networks securely.

Unfortunately, current wallets have notable limitations. For example, many wallets still suffer from “blind signing” – users often approve transactions represented by indecipherable data, with no clear indication of what the transaction will do. This makes it easy to mistakenly authorize malicious contracts or send funds to the wrong address. Other painpoints include difficulty in managing seed phrases, phishing risks from fake wallet apps, and interfaces that can confuse non-technical users.

In this article, we’ll discuss what makes a good crypto wallet and examine some current limitations of traditional wallets and externally owned accounts, along with emerging solutions to address these issues. Finally, we’ll conclude with a look at the future of crypto wallets.

What Makes a Good Wallet?

A good crypto wallet prioritizes both security and user experience, ensuring that people can safely and easily interact with blockchains. Here are some of the main qualities and features that define a reliable, secure wallet today;

1) Security hygiene

A reliable wallet should undergo regular audits and be kept up to date to protect your assets. It should provide clear warnings before you finalize any transactions, ensuring that you understand the implications of what you are signing. This feature helps prevent phishing attacks and the risks associated with blind signing.

Additionally, a good wallet should verify chain data independently rather than relying solely on a single RPC (Remote Procedure Call). This adds an extra layer of security. It's also important to support hardware wallets, which keep your private keys secure on the device itself, minimizing exposure to potential threats. As technology continues to evolve, consider wallets that are moving towards the use of passkeys, as this can help mitigate the risk of seed-phrase phishing.

2) Privacy that actually protects you

Privacy isn’t just a switch; it’s a design. A wallet should help you avoid linking your real identity to a single public address and should minimize cross-address connections so your accounts aren’t easily correlated. Private transfers shouldn’t be an awkward add-on; they should feel natural and easy to use, with sensible defaults that reduce metadata leaks. WalletBeat’s standard is simple: if the wallet’s defaults frequently expose who you are or which addresses you control, it’s not private enough.

3) Self-Custody

Self-custody means you have control over your assets. A reliable wallet enables you to connect directly to your own node, ensuring privacy and resistance to censorship, without relying on the mandatory middleman RPC. Your account should also be transferable, allowing you to switch providers without being locked in.

Additionally, the wallet must uphold Inclusion Guarantees across both L1 and L2 (If a layer 2 Sequencer ignores you, you can post your transaction to L1’s special queue) to prevent a censor from silently locking you out. A wallet that respects Inclusion Guarantees should give you a UI path to use these L1 queues and forced withdrawals when the sequencer censors you.

4) Transparency

Prefer wallets that are open source under a genuine FOSS (Free and Open-Source Software) license so the community can inspect, reproduce, and fix issues quickly. Funding and maintenance should be disclosed, including who pays for audits, infrastructure, and ongoing work. And every transaction prompt should show fees and effects clearly, not just a hex blob.

5) Ecosystem Alignment

The best wallets align with the future direction of the ecosystem. Choose a wallet that supports Account Abstraction (ERC-4337) and offers a pathway for EOAs (Externally Owned Accounts) to access smart-wallet user experience through EIP-7702, including features like batching, alternative gas options, delegated actions, passkeys, and recoverability without address changes.

A good wallet should work well with browsers and Dapps so that it functions smoothly with different wallets. It should use chain-abstraction and secure transaction batching to avoid unnecessary approvals and reduce issues with Layer 2 (L2) networks. These features improve the user experience.

The Future of Blockchain Wallets

In the near future, we will likely see wallets that are easier to use, harder to hack, and better integrated into our everyday digital lives. One major trend on the horizon is the rise of Smart Contract Wallets and Account Abstraction.

Instead of Externally Owned Accounts that rely solely on a single private key, Account Abstraction allows for programmable and flexible wallets. This could mean eliminating the traditional seed phrase, with users authenticating via biometrics or secure hardware modules, while the wallet manages the private keys behind the scenes.

Another area where we’ll likely see growth is transaction transparency and safety. The blind signing issue we discussed is being addressed from multiple angles: more wallets are adopting transaction simulation and human-readable prompts (e.g., showing token names and logos, parsing contract calls into Understandable language for non-technical users), and community efforts like the Verifier Alliance are expanding open databases of contract ABIs to support this.

In the future, your wallet might warn you, “This contract is known to be malicious” or “You are about to give unlimited approval to spend your DAI” in big red letters, preventing mistakes before they happen. User education is part of this future too, but ideally, the wallet itself will do much of the heavy lifting to keep users safe.

Conclusion

If there is one key takeaway, it should be this: a good wallet seamlessly combines security, privacy, self-custody, and transparency, all while offering an intuitive user interface to enhance the experience of these features.

The goal is clear: we need account-abstracted wallets, passkeys in place of fragile seed phrases, human-readable signing, and safer defaults to address the problem of blind signing.

This is the first part of a short series about wallets. Next, we will show you how to connect your wallets to Blockscout through various methods. We will cover using desktop extensions, mobile wallets, and hardware wallets. We will also walk you through the process of setting up your Wallet Connect (now Reown) account to integrate wallets into your dapps.